Magazine

Commentary: The Europe That Can Say No


By John Rossant

When it comes to standing up to big, bad Americans, Europeans are hanging tough just about everywhere these days. In a major policy speech on May 28, French Prime Minister Lionel Jospin cast the U.S. as an evil empire against which a united Europe had to take a valiant stand. Less than a month later, riots greeted President George W. Bush as he met with European Union leaders in Goteborg, Sweden. And when European Competition Commissioner Mario Monti stiffly opposed General Electric Co.'s (GE) proposed $42 billion takeover of Honeywell International Inc. (HON), it seemed to be adding insult to injury.

Beyond the taunts, the tear gas, and the antitrust issues, something very serious is in fact taking shape across the Old World. In a word, the Continent is starting to feel its oats. As well it might: This new assertiveness is a reflection of the huge progress that has been made in unifying the disparate nation-states of Europe since the Treaty of Rome in 1957 set up the precursor of today's 15-state union. Currently, 12 of those states are just months away from adopting a single currency, there is a common European defense force in the making, and the Continent is taking more forceful foreign policy initiatives.

But a new, more mature transatlantic relationship needs levelheadedness, not hot tempers. For their part, Americans are going to have to adjust to a more federal, professionally run Europe. And, indeed, that adjustment has begun--just look at how multinational corporations on both sides of the Atlantic are challenging one another on each other's home turf. Think Vivendi Universal (V) and AOL Time Warner (AOL), DaimlerChrysler (DCX) and General Motors (GM), Vodafone (VOD) and AT&T (T), Boeing (BA) and Airbus.

Keeping those competitive--and sometimes cooperative--corporate relationships on an even keel will be a great challenge. As the no-nonsense Mario Monti has amply demonstrated, a unified Europe is now fully capable of writing its own code of corporate conduct. But as globalization makes the European and U.S. economies ever more intertwined, it is vitally important that the two rationalize their disparate rules as much and as dispassionately as possible. "Europe is more assertive because Europe is more successful," says former U.S. Ambassador to France Felix Rohatyn. "The issue is: Can we play by the same rules? Because, clearly, the rules are different."

JUST POSTURING? The danger now is that Europe's newfound confidence could turn into blinding--and self-defeating--cockiness. In some ways, the atmosphere in Paris and Berlin already has a touch of late 1980s Tokyo--that self-confident but closed society whose emblematic political work was the anti-American book The Japan That Can Say No. Of course, Europe today is far from that old Japanese model, a system still imploding a decade later because of its inability to reform itself. Still, political rhetoric is being ratcheted up all over Europe with inevitable effects on policy. Defenders of such politicians as France's Jospin say that his anti-American barbs and his lurches to the left are merely playing to the gallery in the runup to national elections next spring. But when other galleries are closely watching, that can be a dangerous game to play.

Sure, Europe is learning how to say no, and with luck this will be accomplished in a constructive way so as not to leave the field to extremists and opportunists. Indeed, the ultimate test of maturity will be to know exactly where and how to say yes. At the same time, the U.S. needs to recognize that a more mature Europe will inevitably choose to go its own way when it disagrees with Washington's policies. And both sides will need to figure out how to better manage the disputes that will result without damaging the much broader interests we share. What a delicate balancing act that will be for Europe and the U.S.--learning to be rivals and partners at the same time. Rossant covers European politics from Paris.


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